The property tax is a major source of funding for public safety, schools, roads, libraries, and other services in most American communities. In recent decades, concern over rising property tax bills has led a number of states to impose some form of limit on the amount of property tax revenue …

Newly available data compiled by the Rockefeller Institute of Government show conclusively that state revenue dropped sharply in the July-September 2008 quarter, creating large, additional state budget shortfalls.[1] All indications are that revenue collections will worsen further in coming months.
Of the 42 states for which …

Poor families in many states faced substantial state income tax liability for the 2007 tax year. In 18 of the 42 states that levy income taxes, two-parent families of four with incomes below the federal poverty line were liable for income tax. In 15 states, poor single-parent families of three paid income tax in 2007. And 26 …

Poor families faced income tax bills that pushed them deeper into poverty last year in nearly half of the states with an income tax, according to a new report from the Center on Budget and Policy Priorities. Income tax bills on poor families in those 18 states range from a few dollars to several …

Hearing Titled: “Economic Recovery: Options and Challenges”
There are 29 states that closed shortfalls of $48 billion in enacting their fiscal year 2009 budgets (for the year beginning July 1, 2008 in most states). The shortfalls equaled 9 percent of these states’ general fund (operating) budgets.
Since fiscal year 2009 budgets …

States face two distinct financial problems right now. First, California and Massachusetts officials last week raised concerns about their states’ ability to access credit markets for short-term borrowing. Second, most states have been facing budget deficits that have forced, or …

Twenty-four states (counting the District of Columbia) have enacted an Earned Income Tax Credit (EITC), a tax reduction and a wage supplement for low- and moderate-income working families. State EITCs are based on the federal EITC, which a large body of evidence has shown to serve a number of important public policy goals. States …

The House Leadership’s new stimulus proposal includes more than $14 billion in fiscal relief for states. This is designed to help states avert budget cuts and tax increases that they otherwise will have to institute to balance their budgets but that will make the economic downturn worse by withdrawing demand from the …

Congress is properly focused on designing an appropriate measure to address very serious problems in the financial markets, which many experts persuasively argue is essential to help avert a meltdown in the financial markets and a potentially severe recession. The problems in the financial sector, however, are not the only ones the …

North Dakota’s proposed Measure 2, a major change to the state’s income tax that will appear on the November ballot, would be detrimental to the state for three principal reasons:
Measure 2 is risky and short-sighted. Measure 2 would cost the state a very large amount of revenue — some $400 million per …

A ballot measure to cut taxes that North Dakota voters will consider this November could create major budget problems and hamper investments needed for long-term economic growth, according to a new report by the Center on Budget and Policy Priorities, a nonpartisan policy research organization based in Washington, DC. The measure is among the most radical such …

Update, July 18: For analysis of 2014 efforts to make bonus depreciation permanent, see this report
Stimulus legislation enacted in February included a provision that increased the tax deduction which businesses can claim when they purchase certain types of equipment and place it in service during the 2008 tax year. Suggestions are being made that this …

As it has annually for several years, the Tax Foundation has attempted to measure the current impact of state and local taxation on the residents of each of the 50 states. And once again, the results are very different from the Tax Foundation’s own previous attempts to do this calculation. The Tax Foundations figures — both the …

Legislation that the Senate is considering in response to the ongoing foreclosure crisis (H.R. 3221) includes a provision that would allow non-itemizers to deduct property taxes up to an amount of $500 for an individual and $1,000 for a couple.[1] It would deny the deduction, however, to residents of any locality that raises its …

On May 21, the Center on Budget and Policy Priorities released a report, “Hidden Consequences: Lessons from Massachusetts for States Considering a Property Tax Cap.” The same day, Thomas Suozzi, the Chairman of New York’s Property Tax Relief Commission, issued a …

With New York’s Commission on Property Tax Relief planning to recommend that the state impose a rigid cap on property taxes for education based on Massachusetts’ Proposition 2 ½, a new report from the Washington, D.C.-based Center on Budget and Policy Priorities describes the problems the law has …

On April 29, the Louisiana Senate voted to phase out the state’s income tax over 10 years without proposing any replacement revenues. The House Ways and Means Committee is expected to consider this proposal, along with others that would significantly cut the income tax but not eliminate it, on Monday May 12.
The desire to cut …

Twenty-three states have enacted tax credits for low- and moderate-income working families based on the federal Earned Income Tax Credit. A number of additional states are considering enacting EITCs in the 2008 legislative session. The following provides guidelines that policymakers and others can use to estimate …

Proponents of adopting a tight TABOR limit in Florida sometimes claim that Florida would not experience the same negative effects on the economy and public services that occurred in Colorado. They argue that Colorado’s problems stemmed entirely from one feature of its TABOR, the so-called “ratchet.” (The ratchet, …

Income Inequality Within the States:
Ratio: Incomes of Top Fifth of Families Compared to Incomes of Bottom Fifth of Families
State-specific fact sheets containing information on income inequality over the past two decades, including the changes in average incomes and income ratios, are provided through the links below.
…

I. Executive Summary
A state-by-state examination of trends in income inequality over the past two business cycles finds that inequality has grown in most parts of the country since the late 1980s. The incomes of the country’s highest-income families have climbed substantially, while middle- and lower-income families have …

The gap between the richest and poorest families, and between the richest and middle-income families, grew significantly in most states over the past two decades, according to a new study by the Center on Budget and Policy Priorities and the Economic Policy Institute.
In fact, the nation’s …

The gaps between the incomes of the rich and the poor, and the rich and the middle class, have grown more in Mississippi since the late 1990s than in any other state, according to a new study by the Center on Budget and Policy Priorities and the Economic Policy Institute, two Washington, DC-based …

Almost all major Iowa manufacturers maintain facilities in other states that have adopted a corporate tax reform measure known as “combined reporting” — including several outspoken opponents of Governor Culver’s proposal to adopt combined reporting in Iowa, according to …

For the second year in a row, Governor Chet Culver has recommended that the Iowa legislature enact an important reform in the state corporate income tax known as “combined reporting.” Some Iowa corporations have opposed this change, claiming that it would result in some companies leaving the state or shunning Iowa for …

While the Senate housing package would establish a new property tax deduction for non-itemizers, a little-noticed provision of the bill would deny the new deduction to any resident of a locality that raises its property tax rate between April 2 and next January 1. By preventing localities from …

Americans for Prosperity recently issued a critique of the Center on Budget and Policy Priorities’ analysis of the Florida Taxation and Budget Reform Commission’s revenue cap proposal. In its critique, Americans for Prosperity made several false claims. This analysis addresses the major flaws in their critique.
There is no disagreement between the Center and Americans for Prosperity about the large size of the …

Florida would likely suffer significant cuts in education, public health, public safety, infrastructure and other priorities under the revenue cap proposal the Taxation and Budget Reform Commission will consider on Wednesday, March 26, according to the Washington, DC-based Center on Budget and Policy Priorities (CBPP).
The constitutional …

The Taxation and Budget Reform Commission will soon consider placing an amendment on the ballot to tightly limit revenue growth for state and local governments.[1] This proposal, CP 45, deserves a great deal of attention because it shares the fundamental characteristics of Colorado’s Taxpayer Bill of Rights (TABOR):
it is a …

States, facing their worst fiscal problems in five years, should consider the following four policy options when dealing with deficits: (1) protect their revenues from the effects of federal tax changes, (2) tap their "rainy day funds," (3) don't rule out revenue increases, and (4) avoid "stimulus" tax cuts.
At least 25 states, including several of the …

New rules issued by the Governmental Accounting Standards Board (GASB) that change the way states account for the future cost of health and other non-pension benefits for retirees will force states to make some hard choices.
For the first time, state and local governments must treat the costs of health and other non-pension …

Over the last year, the Department of Health and Human Services (HHS) has issued a series of Medicaid regulations that could significantly affect health care at the state and local level. [1] These regulations, most of which alter longstanding Medicaid policies, do not require congressional approval. In fact, in some cases Congress …

States are experiencing major budget problems; more than half faced or are projecting deficits for the 2009 fiscal year. To meet their balanced budget requirements, many states have had to raise taxes and/or cut expenditures for services such as health care and education — actions that deepen the nation’s economic problems and offset some of …

Policymakers in many states are proposing tax cuts or rebates that they hope will “stimulate” their economies. Such proposals have been issued by governors and/or leading legislators in Alabama, Arizona, Connecticut, Florida, Illinois, Pennsylvania, and Wisconsin, among others. The proposals vary, but many are modeled at …

Idaho is one of seven states that taxes groceries at the same rate as other goods. It is one of five states that offer a credit or rebate to mitigate the tax. But even though the tax falls most heavily on low-income families, Idaho—unlike any other state—excludes many poor families (mostly working families) from …

The federal “economic stimulus” package enacted on February 13 not only cuts federal taxes, but also threatens to reduce many states’ corporate and personal income tax revenue this year and next year.
The potential revenue loss comes at a particularly problematic time for states, because about half the states …

With a slowing economy increasing the threat of hunger for many Idaho families, lawmakers should extend the state’s grocery tax credit to those who need it the most, according to a new report from the Washington, DC-based Center on Budget and Policy Priorities.
Such action would undo a dubious …

Executive Summary
After they emerged from the fiscal crisis earlier in the decade, many states began preparing for the next economic downturn by setting aside “rainy day funds,” or reserve accounts designed for use when revenues decline or expenditures increase unexpectedly because of downturns, natural disasters, or other events. A rainy day fund serves …

States are on the brink of their worst fiscal problems since the 2001 recession. At least half the states are anticipating budget shortfalls for next year (fiscal year 2009). For those states that have estimated the size of the gap, estimated deficits range from $34 billion to $38 billion in total. Among affected states, …

Most states target tax relief to low- and moderate-income households. In part, this is because without such relief, state and local taxes would absorb a much larger share of the income of poor and near-poor families than of families at higher income levels. This is particularly true in states that do not use a personal income tax, …

Grants to state and local governments have long been an important way in which the federal government supports and administers programs efficiently. The new budget, however, continues to significantly erode those grants. This leaves states and localities the option of either curtailing services or increasing their own taxes to …

For the most up-to-date information on state budget shortfalls, please view our newer analysis:
"State Budget Problems Worsen: 13 States Face New Shortfalls"
At least 29 states plus the District of Columbia, including several of the nation’s largest states, faced …